Please ensure Javascript is enabled for purposes of website accessibility

Is Costco Cheaper Than Amazon?

By Daniel B. Kline - Updated Jun 15, 2017 at 3:13PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

There are deals to be had at both retailers, but two recent reports show that there is a clear winner.

While some Costco (COST 0.75%) members shop at the warehouse club for the joy of discovery, or even the free samples, it's fair to say that most pay for a membership in order to save money.

The same can be said of Amazon (AMZN 3.53%) Prime members. In fact, the roughly 80 million Prime Members and just-over 88 million Costco cardholders globally are both almost certainly largely made up of people driven by the search for value.

One of the two companies does actually offer better prices, according to two recent reports. The difference may not be enough to get devoted fans of the second-place retailer to switch, but it's a surprisingly decisive win.

A Costco store

Costco and Amazon are competitors that co-exist surprisingly well. Image source: Costco.

Which retailer is cheaper?

BMO Capital Markets analysts Kelly Bania and David Lantz recently completed a price study comparing shopping in-store at Costco,, and Amazon, Barron's reported. The two looked at a basket of 54 items and found that shopping in a Costco was the best deal while still beat Amazon, but not by as much.

That matches the results of a similar study done by The website compared shopping at a Costco warehouse to buying from Amazon examining a range of essentials and basic items including toilet paper, party snacks, and some basic pharmacy purchases including Advil.

"The bottom line? Costco is cheaper nearly across the board (but not by a ton)." The results from SFGate concluded that buying the staple items at Amazon would set you back $329.43, whereas the same purchase at Costco would be $313.14.  

It's not just about which is cheaper

Amazon and Costco have a lot of overlap in members because both appeal to consumers looking to save money. Recent research from GfK first reported on by eMarketer, showed that the people willing to pay Amazon $99 a year for Prime's free shipping (and other perks) join warehouse clubs including Costco in higher numbers than non-members.

That backs up an October report from Morgan Stanley covered by The Seattle Times. The financial firm surveyed 2,700 people and found that nearly half (45%) of Costco members also had an Amazon Prime membership.

"Members of both Costco and Prime have not and generally do not intend to spend more with one retailer/e-tailer at the expense of the other," according to the report, which noted brand loyalty being a boon to both.

Still, Costco is cheaper

While Costco and Amazon do not generally threaten each other's business, the warehouse club does have a clear edge in pricing, at least when it comes to staples. That's an advantage the chain has been working to press as it has been exploring ways to make it easier for consumers to pop into its stores.

Of course, Amazon sells tens of millions more items than Costco does. That protects its value to consumers who can justify paying for memberships to both, in order to save money.

Daniel Kline has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon and Costco Wholesale. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Costco Wholesale Corporation Stock Quote
Costco Wholesale Corporation
$539.82 (0.75%) $4.00, Inc. Stock Quote, Inc.
$142.69 (3.53%) $4.86

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/10/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.